Getting the Best Deal on Health InsuranceAfter Health Care Reform

By Patti Goldfarb & Vincent Morelli

What Employers Need to Know AboutBefore they get their renewal letter:

What’s different this year

Mandatory benefits, eligibility periods,

How to qualify for health insurance tax credits

Higher costs, less benefits—helping youremployees

What’s involved in adding supplementalbenefits

Renewals

What’s considered affordable, New strategies, Caveats

Benefits

Employee Contributions

Tax Credits

Helping Employees

The Supplemental Process

Why is this year’s renewal so different?

• ACA mandate require:• Age based rates for each employee

• Separate rates for each dependent• Plan designs based on metallic tiers

• Bronze, Silver, Gold and Platinum• Essential Health Benefits

And why are my premiums so much higher?

Health Reform Mandates affect

premiums

ESSENTIAL HEALTH BENEFITS1. Outpatient hospital care2. Trips to the emergency room3. Treatment in the hospital for

inpatient care4. Care before and after your baby is

born5. Mental Health and Substance use

disorder services : This includes behavioral health treatment, counseling and psychotherapy

6. Prescription drugs7. Services and devices to help you

recover if you are injured or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation and more

8. Your lab tests9. Preventive servicers including

counseling,, screenings and vaccines to keep you healthy and care for managing a chronic disease

10. Pediatric services : This includes dental care and vision care for kids

*from www.healthcare.gov

ESSENTIAL HEALTH BENEFITS CONT’D

What Every Policy Must Cover

Eligibility Periods• Eligible employees cannot be made to wait more than 90 days

• No more first of the month following 90 days of consecutive fulltime employment

• What constitutes an eligible employee?• Consecutive fulltime work of __ days• Completion of a training program• Attainment of some goal

This can be tricky

• Charging more than 9.5% of wages can triggers penalties• For employers with > 100 employee• If an employee purchases coverage in the Exchange because

they can’t afford the employer’s plan and• If an employee reciev.es s subsidy from the Exchange• $3,000 per employee

• Defined Contribution is replacing percentage of premium

• Allows employees more flexibility to choose benefits they really need

• Easier budgeting for the employer• Works well with private exchanges

Employee ContributionsPassing on premium increases becomes more difficult

Small Business Tax CreditBefore you start you need to know: FTE, Average Wages, Employer Premium Contribution, If you are Tax Exempt or not, Other

credits your get from the state and Avg. State Premiums

If your total premium > or < the avg. for the

state

Do you have < 25 FTE?

Is your avg. EE wage < $50,000?

Yes

Do you provide 50% or more of your EE

only premium

Yes

Yes

Yes> 10 FT

employees& < $25,000 avg,

wageYes

No

No

No

Does not Qualify

Tax Credit = Lesser of 50% of actual ER Premium Contributionor proration of contributionsagainst small group avg.for the state

No

Box A Premium

Contribution – (((FTEs-10)/1

5)x50%))

ThenNo

Box A –(((Avg. Wage-

$25000/$25,000)x Premium

Contribution x 50%)) = Tax

Credit

Small Business Tax Credit• Excludes wages of

• Sole Proprietors• Partners in a partnership• A Shareholders owning more than 2% of an S Corporation• Any owner of more than 5% of other types of business (i.e. LLC, C

Corporation, etc.)• Family members (defined as)

• Children and descendents of children• Siblings• Step Siblings • Nieces and Nephews• Aunts and Uncles• In-Laws

Only looks at FICA Covered Wages

Private exchanges are shifting the way we think about and buy health insurance – and they’re changing the whole game.

What is defined contribution? Defined contribution is a way for employers to control the amount they pay towards benefits. Through this option, employees receive an account credited by the employer for insurance. It’s like an allowance for the employee to spend on the health care they choose. If the employee wants more robust coverage than their employer’s contribution can cover, the employee can choose to pay the remaining portion of the bill.Many of the details of defined contribution still remain to be seen. For instance, employers can set the stipend, but they still need to pay attention to affordability requirements to avoid penalties. And, there may be certain parameters on the types of benefits that can be used by an employee's allowance. Still, it’s a unique concept that is already beginning to take center stage in the discussion as private exchanges become more popular.

Carefully equipping employees for what’s aheadConsumerization of health care is not new – it’s a much broader trend. The reality is that with or without exchanges, individuals will continue to make more and more decisions when it comes to their health. Still, the emergence of exchanges is a game-changing shift in benefits delivery, in which everything from how employers offer insurance to the way employees protect their health and well-being, are quickly and fundamentally changing. What’s more – is that individuals may not be prepared.

Supplemental insurance is a trusted benefit option to help fill the blanks

For many employers, supplemental benefit options can help solve a number of concerns and challenges that have surfaced during this time of sluggish economic

growth, a recovering housing and retirement savings environment and many workers back in the work force full time after being out of work for as much as 9

months in the last 3 years.

Workers gain responsibility; but face risks

In many instances consumers are making more of their health care choices – including how much they spend on health care coverage and what type of

coverage they have.

Why Supplemental Insurance Matters

As health care costs continue to rise, and plans focus to meet consumer demand, supplemental insurance plans are even more relevant and have importance as a

key piece of a worker’s overall financial plan.

Businesses gain more by making supplemental insurance available

• Employer Specific Messaging• Control of the enrollment

process and timeline.• A consultative approach to

assisting employees with their benefit options selections and enrollment tool

• The ability to build your own cases in real-time, using core benefits and Aflac products

• Competitive services and solutions:

• Web-based broker and client reporting.

• FSA needs analysis• Employee-benefit

statements and electronic forms

• Standardized carrier files

• Dependent-beneficiary review

• Census cleanse

CORE Benefit Enrollment SolutionsAflac’s Enrollment Architect: A valuable new-case setup and enrollment tool

Enrollment Architect Value Adds •Census Update•Discount Cards•Beneficiary Audit•401(k) Plan Communication•FSA Communication and Enrollment•Soft Dependent Audit•Core Benefit Communication•Core Benefit Enrollment